What Measures Can Reduce Poverty in India While the Super-Rich Become Wealthier?

Source: https://www.ucanews.com/news/indias-rich-poor-gap-challenges-the-church/78189

India is a land of stark contrasts, where extreme wealth and severe poverty coexist. As the super-rich continue to amass significant wealth, it becomes increasingly important to implement effective measures to reduce poverty and promote equitable growth. The growing disparity between the affluent and the impoverished highlights the urgent need for targeted interventions. This study explores various strategies to alleviate poverty in India, emphasizing the importance of comprehensive and sustainable approaches to ensure economic growth benefits all segments of society, particularly the most vulnerable populations.

Understanding the Poverty Context in India

Poverty in India is multifaceted, involving a lack of income, education, healthcare, and access to basic services. According to the World Bank, around 22% of India's population lived below the poverty line in 2021. The Gini coefficient, a measure of income inequality, stands at 35.7 (as per World Bank data), indicating significant income disparity.

Key Measures to Reduce Poverty

1.      Enhancing Education and Skill Development

Education and skill development are fundamental to breaking the cycle of poverty. Ensuring access to quality education can empower individuals with the skills needed for better employment opportunities.

Statistics:

·       Literacy Rate: As per the National Sample Survey (NSS) 2017-18, India's literacy rate stands at 77.7%.

·     Skill Development: According to the National Skill Development Corporation (NSDC), only 10% of the workforce has received formal skill training.

Actions:

·  Strengthen Primary Education: Increase funding for primary schools and improve infrastructure.

·        Vocational Training: Expand vocational training programs and ensure alignment with industry needs.

·         Scholarships: Provide scholarships for underprivileged students to access higher education.

Figure 1: Literacy Rate in India (2017-18)

Source: National Sample Survey (NSS) 2017-18

2.      Improving Healthcare Access

Health and poverty are closely linked. Poor health reduces an individual's ability to work and can push families into poverty due to high medical expenses.

Statistics:

·         Health Expenditure: According to the World Health Organization (WHO), India's health expenditure is 3.5% of GDP.

·         Infant Mortality Rate: The infant mortality rate is 28.3 per 1,000 live births as per the Sample Registration System (SRS) 2019.

Actions:

·         Universal Healthcare: Implement universal healthcare schemes to ensure access to medical services for all.

·         Public Health Infrastructure: Increase investment in public health infrastructure, especially in rural areas.

·         Health Insurance: Expand health insurance coverage to reduce out-of-pocket expenses.

Figure 2: Health Expenditure as a Percentage of GDP (2019)
















Source: OECD Health Statistics 2021, WHO Global Health Expenditure Database

3.      Agricultural Reforms

Agriculture employs nearly 50% of India's workforce, yet it contributes only about 17% to the GDP. Improving the agricultural sector can significantly reduce rural poverty.

Statistics:

·         Agricultural GDP: Agriculture's contribution to GDP is approximately 17% as per the Economic Survey 2020-21.

·         Farmer Incomes: The average monthly income of a farming household is ₹6,426 as per the NABARD All India Rural Financial Inclusion Survey 2016-17.

Actions:

·         Modernization: Promote the use of modern agricultural techniques and equipment.

·         Market Access: Improve market access for farmers through better infrastructure and digital platforms.

·         Support Prices: Ensure fair minimum support prices (MSP) for crops to protect farmers from market volatility.

Table 1: Contribution of Agriculture to GDP and Employment (2020-21)

Sector

Contribution to GDP (%)

Employment (%)

Agriculture

17

50

Source: Economic Survey 2020-21

4.      Financial Inclusion

Financial inclusion ensures that all individuals and businesses have access to useful and affordable financial products and services that meet their needs.

Statistics:

·         Bank Account Ownership: As per the Global Findex Database 2017, 80% of Indian adults have a bank account.

·         Microfinance: The microfinance sector in India has a gross loan portfolio of ₹2.36 trillion as of 2021, according to the Microfinance Institutions Network (MFIN).

Actions:

·         Banking Services: Expand banking services in rural areas to increase accessibility.

·         Microfinance: Promote microfinance institutions to provide credit to the underserved.

·    Financial Literacy: Enhance financial literacy programs to educate people about financial management.

Figure 3: Bank Account Ownership in India (202)





















Source: Global Findex Database 2021

5.      Employment Generation Programs

Employment is the key to economic empowerment. Government programs aimed at creating jobs can lift people out of poverty.

Statistics:

·         Unemployment Rate: The unemployment rate in India was 6.1% in 2017-18, according to the Periodic Labour Force Survey (PLFS).

·         Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): Provided employment to 72 million households in 2020-21.

Actions:

·         MGNREGA: Strengthen and expand the scope of MGNREGA to provide more employment opportunities.

·         Skill Development: Enhance skill development programs to match the needs of various industries.

·         Entrepreneurship: Support entrepreneurship through funding and training initiatives.

Table 2: Employment under MGNREGA (2020-21)

Year

Households Provided Employment (in millions)

2020-21

72

Source: Ministry of Rural Development

Addressing Wealth Inequality

While the super-rich become wealthier, measures can be taken to ensure that this wealth benefits the broader population and reduces poverty.

1.      Progressive Taxation

Implementing a more progressive tax system can help redistribute wealth. Higher taxes on the wealthy and large corporations can fund social programs.

Actions:

·         Wealth Tax: Introduce or enhance wealth taxes on high-net-worth individuals.

·         Corporate Tax: Ensure fair corporate taxation to generate revenue for social programs.

·         Tax Evasion: Strengthen measures to prevent tax evasion and ensure compliance.

2.      Corporate Social Responsibility (CSR)

Mandating CSR can ensure that companies contribute to social development.

Statistics:

·         CSR Spending: According to the Ministry of Corporate Affairs, companies spent ₹24,689 crore on CSR activities in 2019-20.

Actions:

·         Mandatory CSR: Enforce mandatory CSR spending for large corporations.

·         Focused Areas: Direct CSR funds towards education, healthcare, and rural development.

·         Transparency: Ensure transparency and accountability in CSR activities.

Policy Recommendations

1.      Integrated Approach

An integrated approach combining education, healthcare, financial inclusion, and employment is essential for sustainable poverty reduction.

2.      Public-Private Partnerships (PPP)

Leverage PPPs to fund and implement social programs effectively. Collaboration between the government, private sector, and civil society can bring in the required resources and expertise.

3.      Monitoring and Evaluation

Regular monitoring and evaluation of poverty reduction programs are crucial to measure their effectiveness and make necessary adjustments.

Conclusion

Reducing poverty in India while the super-rich become wealthier is a complex challenge, but it is achievable with targeted and inclusive measures. By investing in education, healthcare, agriculture, financial inclusion, and employment generation, and by addressing wealth inequality through progressive taxation and CSR, India can create a more equitable society where economic growth benefits all its citizens.

 

References:

1.      World Bank. (2021). Poverty & Equity Data Portal: India. Retrieved from World Bank

2.      World Bank. (2021). Gini Index (World Bank estimate) - India. Retrieved from World Bank

3.      National Sample Survey (NSS) 2017-18. Retrieved from Ministry of Statistics and Programme Implementation

4.      National Skill Development Corporation (NSDC). (2019). Skill India Report. Retrieved from NSDC

5.      World Health Organization (WHO). (2019). Global Health Expenditure Database. Retrieved from WHO

6.      Sample Registration System (SRS) 2019. Retrieved from Census India

7.      Economic Survey 2020-21. Retrieved from Ministry of Finance

8.      NABARD All India Rural Financial Inclusion Survey 2016-17. Retrieved from NABARD

9.      Global Findex Database 2017. Retrieved from World Bank

10.  Microfinance Institutions Network (MFIN). (2021). Microfinance Pulse Report

11.     https://www.oecd-ilibrary.org/sites/ae3016b9-en/1/3/7/1/index.html?itemId=/content/publication/ae3016b9-

en&_csp_=ca413da5d44587bc56446341952c275e&itemIGO=oecd&itemContentType=book           

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